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MONEY With Melissa Francis

News/Business. Melissa Francis with a breakdown of the day's top stories and their impact on the American Taxpayer.

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 130 (Fox Business)

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mpeg2video

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ac3

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704

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480

TOPIC FREQUENCY

U.s. 8, Cyprus 7, Boeing 7, Us 5, Europe 4, Jonathan 3, America 3, T. Rowe 2, Italy 2, Cuba 2, Spain 2, Miami 2, Lng 1, Realtors 1, Malia 1, Barack Obama 1, Transcanada 1, As Long 1, Melissa Francis 1, Fracking 1,
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  FOX Business    MONEY With Melissa Francis    News/Business. Melissa Francis with a breakdown of the  
   day's top stories and their impact on the American Taxpayer.  

    March 19, 2013
    12:00 - 12:59am EDT  

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a massive bloodletting in jobs that got flung all over the map, it was a mitt an and -- hit and miss. you can't do that prior. what do you say? >> you are right. you can look at keystone, a project that department of state concluded was environmentally safe yet we're style without a project, and department of energy conclude we can safely export natural gas, this is not even about a trade off between the economy and the environment. we can do these projects, prevents these projects will stop a lot of jobs from being created, it is not going to make a development in global emissions. it making no sense to me and the
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economy. neil: malia. >> i just quickly top say, i understand how we like to take things and combine themm but, i do not think that the only reason why keystone project is not happening is because, barack obama asked his agency this question, to get back to original topic, what i think is really important for us to look forward and you know neil, i don't think that anyone would disagree with you that jobs are important, the problem with laser beam focus you have a society and a lot of things that need to be focused on, laser beaming becomes narrowing, i don't think that is how we' our president or anyone in congress to just have like this one bullet silver bullet solution on what will save the u.s., that is not only thing that u.s. nee right now, we not only have a jobs problem. neil: i think it should be your
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highest priority. >> it is important for us to look -- >> okay, i understand. >> i don't know why we're again saving the world. neil: i'm not again saving the whales and birds, i'm i want jobs, that is tomorrow. sandra: thank you for having me. "money" with melissa francis is next. melissa: crisis in cypress as deposit features rock the market. will wall street be able to hang on to the rally? and should you still jump in, or maybe get out. chief investment strategist with charles schwab. plus it's a time to go for the gold? economic optimism improves. but will the euro crisis kick start a comeback? a top gold bug and bear in the ring and debated. and millions of us use it but there is a new plan to cap it and generate piles of revenue for the government.
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it could pull a rag out from under the marketnd the homeowners. the latest details you cannot afford to miss. even when they say it is not, it is all about "money." ♪ melissa: all right, first to today's market moment. the raid on deposits sending chills down the spines. the market phone for the second session in a row. the first back-to-back losses nearly a month in case you're keeping track. investors gear may be best reflected in the vix. our top story, the critical situation in cyprus threatening to set off a chain reaction around the world. the european nation wants to tax all bank deposits up to 10% in order to secure a $13 billion bailout for the government.
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this move is unprecedented, it would basically allow the government to skim the bank accounts of every single person who makes a deposit into a cyprus bank account. if that is not enoug the country has closed all banks until thursday so if the decision is made there will not be anything anybody can do if they have money in the bank. now the world is bracing and waiting. what you should do with your money and with the impact could be. so excited to have you on tonight. university of chicago professor. what a team. t me start with you because i want you to set the scene for us because some people hear this and i think of cyprus is a tiny island, who cares. this could set off a chain reaction around the world, tell me why. >> if you have your bank
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deposits in another country that is shaky, italy, spain, portugal, and greece, you will say in my the next in line? so what we will be looking for over the next week or at any time or attention turns to a potential crisis in any of those countries is whether or not there is a run on the bank. the other thing we noted is they are still jiggling alon around h the terms of the deal. i'm surprised included small depositors, ordinary people who had nothing to do with his coming out looks like they may be taking it out of the mix. melissa: 40% roughly people who have deposits are not residents of the country. this could cause people to yank the money out if they can, flee to other places around the world. switzerland may have to pay a negative interest rate if they get impounded.
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the thing europe needs the most right now in order to get out of this mess is economic growth and youan't do that if you are having a run on your bank. you need financial infrastructure. what could be the impact if we see a slowdown in europe, the opposite of what we need right now. >> we're already having a slowdown in europe. the numbers are quite ugly. it is a question of whether we are fighting some sort of stability, whether we have hit the inflection point cooking stuff gets worse and even a worst-case scenario on banks and other nations, think it is too soon to suggest that. it is the banking system the size of this economy, you talk about the fact that large percentage of the deposit are outside attempting to trick the nation and the bank in the unique way. i sure hope they backpedal on insurance deposits, that would provide a little bit of
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stability and i hope they suggest this is not something we're looking to do broadly across the euro zone nations. melissa: do you think they will do that, or do you think the opposite, that other people follow suit? this is really unprecedented. they're basically skimming people's bank accounts. >> i agree with both of you, which is always a good thing to do. the fact is they will try to reassure people this is a one off thing. they have rung the spell. now people know especially larger depositors know if they're in italy or spain they could be hit by this. the one thing we have not mentioned is russia. love those large deposits are from russians.
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including those who had taken the money. the fact they're taking a haircut is not anything ople want to cry tears over, the thing is now that we have crossed this red line, will the confiscation of other peoples property they call it tax, but it is a confiscation, will that go onto other countries? melissa: talk to me about the markets in the u.s. in relation to that, with a new record after new record, today it seems like it is slowing down, what is your outlook for people in the market were sitting on the sidelines thinking about getting out if something happens. >> let's assume this cyprus situation shortly contained. if what you may have seen today is indicative of the move the market is in with many investors where you have a big weakness in the futures market opened up relatively weak, very quickly turning around. it is a characteristic of the
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market right now, a lot of sideline money looking for that dip. you have the recipe for a short-term correction which may be in the cards anyway. i remain optimistic longer-term, if you could have a short-term pullback at any point, but looking at the action, right now suggests we're still in a fairly healthy environment. melissa: you are the first person i have heard say that today. even though we had a down day, shows a little bit of strength in the market because it wasn't even weaker based on this news? speak i think it could have been weaker, and a lot of my looking to buy the dip. two days of weakness. i'm not here to forecast what every wiggle in the market is going to be nor do we think investors should, but with part
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of your question is fed should investors get in, i am very fond of believing and saying get in or get out, that is gambling on a motive in time, should be a process over time. i do think there is a lot of underinvested investors in the equity on the fence looking for this. you get the money looking into by very quickly. melissa: you're both very fantastic, we really appreciate your time. melissa: here is the "money" question of the day, are you worried this could have been to other countries? you can follow me on twitter. all right, should you be going for the gold? many experts say the gold glory days are over, but any more than $12 per ounce today.
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could the bailout jitters cause investors to flock into gold? with me now, strategist and founder of fearless wealth, and jonathan hoenig, fox news contributor. thank you to both of you. let me let you make your case first, what do you think investors should be doing in light of the conversation you just heard that came beforeou, what do you think? >> the cyprus thing is in part of what has been going on over the last 12 years, a chain of concern in people. we have had a small correction, but the fact physical demand is going up, this is just another situation and i'm glad somebody else said it, cyprus is not taxing people, they're taking money from them. this is getting increased
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concern for people in history says when people's concern goes up, they go toward a sound investment and historically 2000 years gold has been that sound investment to only see this as another reason why people's concern increases. melissa: jonathan, what do you say about that? >> it is not exactly a real big move. bank of america while there was a banking crisis in europe, bank of america hit a 52-week high today. investors might be concerned, but i think they should actually avoid gold. more than any other reason, it is tremendously weak. stocks are on wonderfully forward-looking indicators. it has been a weak asset. you have to look at how assets are performing right here, not now.
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melissa: mayb may be the reasond student jump today is because this is the calm before the storm. maybe this was a golden opportunity to get in on gold read >> i think gold is in an 18 year bull market. melissa: why is it 18 and we are 12 in? why are you predicting 18, why not 18 or 17? >> there's a history of the cycles that runs about 17 and a half years and what drives this cycle is what people are willing to pay for $1 of annual earnings for the s&p 500. when people are willing to pay more and more for the $1 of annual income dividend yield, you don't want to be into gold, but since 2000, people are paying less and less of annual income and when it goes down
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over time it doesn't settle at 20. it usually ends with above single digits. that takes about 17 and a half years. i don't think a change of concern has changed fundamentals haven't changed. melissa: jonathan, jonathan, wait. >> what has happened in the last 12 years as gold has gone from being an asset which was doubted, not owned, to being widely owned and widely endorsed by the heard, if you will. if you want to look at the reality of what is happening in the market today, the dollar is strong, gold assets are weak. it is easy to say five, 10, 15 years down. melissa: on no very wealthy, very smart ceos who ask to have their bonuses paid in gold
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because they're so worried about the currency and the market, so worried about what is going on in our country. these are really smart, really wealthy people. speakers should have asked to being paid in the stock in their own company. all of this concern of the currency, money printing, etc., doesn't exist. melissa: thank you for coming on. tell me what you think, the mortgage tax deduction could be over. that would be bad news on the housing recovery. plus, a sleeping giant awakes, the grim days for natural gas prices may be ending. so how can investors still jump in on the ground floor? a top expert will tell us how.
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more "money" coming up, don't go anywhere.
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melissa: let's talk about the
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mortgage tax deduction, 46 when americans claim they read off in 2011 nearly 40% of all individuals tax returns. it is a hugely popular deduction for money i mayans of homeownery year. it could be changing in a big way which might have a big impact on the housing industry. he was more details what you need to kno is former fannie mae executive vice president institute fellow. welcome to the show. this is having a huge impact on housing industry, wouldn't it? >> of it were done right, and wouldn't have a huge impact, to be a beneficial. this deduction is outlived usefulness. literally 100 years, so the value of it has declined and declined and declined year-over-year. use the money that you saved to reduce marginal impact bracket which would be positive.
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melissa: the devil is in that last detail you mentioned, what we really use eliminating it to lower marginal rates or would it be another thing that is sucked out to pay higher taxes. let's talk about how their talk about doing it in with the best way to do it would be, it wouldn't be so destructive to the market. the deduction is up $2 million, cut that in half, it is a psychological inducements to get a lot of people into the market. >> what it is is a psychological inducement for realtors to say buy a bigger house than you otherwise would buy because otherwise uncle sam would subsidize it. they have been doing it for many, many years. if yoit to convert into a tax ct just moved the distortion from the high-end of the market to the low-end of the market and
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have already been through 15 years of distorting a low-end. this is just bad policy no matter how you look at it. this is an opportunity and we should take it. not worth as much, get rid of it over 10 years and the end of the day the devil is in the details, you have to use the money on the lord marginal tax rates. melissa: there are people weeping and throwing wads of paper. they make less than $100,000 per year. >> of the people who own homes, 40% itemize. melissa: a vast majority of those who used the deduction that less than $100,000 per year. it would hit people who make less money even harder.
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>> i don't think that is the case because we look at the standard deduction for couples is now up to 12,000, $13,000 so if you're making under $100,000 per year, you get a $12,000 standard deduction, that pays for a lot of interest so you may be paying 13, falling into the production, only getting tax $1000. that is a false argument. melissa: a lot encouraged brokers to get into a bigger home, so even if that is wrong in the sense it is only good reason to get into a bigger home, it would in fact get people to buy less expensive house, wouldn't that be a tough thing to do to market right now when the housing recovery is just getting legs? >> the problem is the housing lobby now is never the time, over 30 or 40 years to discover the time to make any policy changes so look at it and see
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how the lowest interest rates in 100 years, house prices are down from where they were so if you will not do it now, you'll never get it done. of course they will say it will cause dramati tremendous room. of course they're going to say that. melissa: lord only knows it read thank you for coming on, great stuff. coming up on "money," a high not seen since 2011. natural gas is a sleeping giant, that is roaring awake. that would take it home. how you can cash in. plus, investors could not care less about the dreamliner nightmare, they're pushing the stock toward a five-year high. is the worst over for boeing?
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we have the details. can you ever have too much "money"? ♪
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melissa: so turning to the weather now, spring officially starts this week and we expecting a drop in natural gas prices but instead we are seeing a pretty unusual spike. a 16 month high today, prices up 11% in the past month so this ed to be a pretty quiet markets now becoming a hot commodity. in fact my next guest calls natural gas a sleeping giant waiting to be awakened. how tightly is the shipment supply going to squeeze consumers? president and ceo joining me now. why do you think this is a sleeping giant, first of all?
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>> like you said, this market has been tracking a very narrow range for years. it has been in the nrow range between 2-$5 for as long as i can remember. it just hasn't been a very interesting market to trade but we are seeing a shift in demand. demand is starting to meet supply, which for years it could not get close. not as much demand. we're starting to see those to approach each other now and getting much closer and new technologies, live, more gas-fired powerplants, that is no powerplants being built charcoal fire. a lot of elements coming to light. melissa: part of the reason we have seen natural gas is because of the tremendous supply. it is created just this tremendous supply in the u.s.
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don't you think supply is going to keep prices suppressed for a while longer? >> it is 40% less drilling this year over last year already, it is certainly going to bring in more supply but the thing is we are seeing much more demand than we have ever seen before. they're not quite at the same level yet, but they are growing and growing. demand will surpass supply, less production and producers not as eager to jump back in and produce and produce and produce. ey will want prices to move up higher. so we are seeing a crossover now. we're starting to see a crossover in demand. even with fracking. melissa: there is so much demand that can come on relatively quickly. there are people willing to produce and the reason is that production is down 40% year over year is because prices have been so depressed. people will go out and immediately drill and the price
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will come down, no? >> i would compare it to the rare earth metals market. because a lot of production come in, i don't think you will see it be as volatile as that. it will not come into quickly cause until they see the price that is attractive, it will not get that high that quickly. it will be over five years, i believe. this is a double-edged sword. this could create a lot of jobs if the government could participate in this rather than corn-based ethanol and say we will start program to create more pipeline in the northeast and the whole infrastructure of pipeline, it could create millions of jobs in all different areas. melissa: for the people in the audience you have convinced, what is the best way to make money off of it so you can hedge a higher energy bill for yourself, what stocks do you
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like? >> there are several ways to play it. companies that have not been able to break out, transcanada comes to mind. a division where lng is a big part of this equation. this could be huge exports for the u.s. if they could find a way to make it affordable and build more ships and terminals. of course there is the etf, people can look at that and primarily what we do is we trade options on futures and futures on the natural gas as well. for those who can handle a little bit more speculation. melissa: thank you for coming on. a lot of people talking about it and really agreeing with you, thank you for coming on to explain your theory and how to make money off of it. >> thank you, melissa. melissa: the cyprus helped to surge a selloff in the oil
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futures but eventually muscled its way back up $0.29. oil has climbed for seven of the past eight sessions. venezuelan opposition presidential candidate says he will and oil to cuba if elected. venezuela had given about 100,000 girls of crude per day to cuba but says giveaways to other countries has to end if he wins office. the special electi is scheduled for april 14. iraq offered well below market rates to asia according to reuters. undercutting saudi arabia dominance in the asian market. in the third largest oil supplier in china, india and south korea. up next on "money," what dreamliner nightmare? pushing stocks to a four-year high. we'll tell you what the airliner may see clear skies ahead, plus advertisers everywhere milk march madness even if they are not official sponsors.
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i think it doesn't make a difference, but top marketing expert says i am way off the mark. piles of "money" coming up. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
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melissa: boeing said they have fixed the problems and plans to be back in the sky in a number of weeks. who knows if people actually want to travel on one of these flying firebombs but the funny thing is investorsdon't seem to care at all, in fact boeing stock has risen more than 10% since the dreamliner was grounded in mid-january. here for more on this is senior editor. they give for coming back on the show. >> "flying firebombs?" melissa: there has been a lot of the fire. it is a little bit like a bomb. >> their job is to store a vast amount of energy, so they have a lot of history of fire problems and things like that. melissa: this thing is doing particularly badly. the fix weighs 150 pounds which completely negates having the battery at all, the whole thing was that it is later, why don't
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they just give up on the lithium-ion battery and go back to the traditional battery? >> the world is looking for a better batteryhat just for airplanes, but for power grids, all sorts of things. once that comes along, boeing will switch for it. these planes have a 20 years sales cycle. if you have a six month glitch, that is not going to dramatically alter the finances for a company like boeing. melissa: we will not think about this every time i see i'm going to get onto a boeing 787, i will not go switch the flight were not booked a ticket online? you can see what kind of a plane it is. >> what will you do instead? they all have issues at the beginning of production. airbus had an engine transmission problem.
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we talked but mo with boeing because this aircraft is very important, 30% better fuel efficiency, passengers like it, it is important they are getting a lot of publicity. melissa: a lot of negative publicity. but investors don't seem to care at all. why has it continued to go up through all of this? that is ridiculous given all the problems they have, loo look ate year-to-date chart, that makes no sense. >> investors are way too ssimistic. if you have a smartphone had a malfunction like this you lose entire sales cycle. take a look, $86 change last i saw. a couple of years from now, it will earn $8 per share and have $11 per share, it is a couple of years away.
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melissa: are you confident they will do the sales they have given they are not back in the air yet, do you still think you'll have the sales cycle you are talking about? >> you don't want my scientific judgment on whether or not. i tell you, there are only two big companies in this business. i believe the engineers who they say they will get a fix. melissa: is anything other than coming out of this shining price and the stock? >> a big earning ramp up ahead of it as increases in production, just for making these things commercially. there are good earnings ahead of the company. there could be among passengers people who say aren't they
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played with a proble they will have a short memory. melissa: would you buy this stock? and would you get on one of these planes? >> i will give it another couple of months. let's give it until november. let's put a few in the air and let somebody else get on. melissa: i like it. thank you for coming on. coming up on "money," why pay to be an official sponsor? about every advertiser under the sun is trying to cash in. top marketing expert trying to set me straight. at the endf the day it is all about "money." ♪
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♪ melissa: let the madness begin as march madness kicks off, companies like pizza hut and others are finding ways to score big with viewers at what cost which mark officially sponsoring advertising can cost millions so some businesses are tryi to tie and promotions without using
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trademarked terms like march madness or final four reserved to those who paid the partnership but is it a slam dunk for advertisers? bruce, welcome back to the show. i think it is really clever for them to pile on and try and take advantage, how much advantage u really get if you're selling something unrelated to march madness, how big of a value is it, really? speak it is not a matter of your product, it is a matter of whether your messages related to march madness. it is called news jacking. they grab everybody is talking about and use it to their advantage. they have to walk a thin line because you don't want a trademark violation but you don't want to pay the bi bucks the ncaa is insisting on c. figure out ways to fit the message. we talked about the super bowl when oreos did their message and
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home depot did the light bulb adds. they weaseled their way in. melissa: it was genius, somebody standing by so clever said you can still dunk in the dark. they sent this photo of the oreo cookie that looks like it is in the dark. it was amazing, but you are sitting in the dark with nothing to do while the super bowl is not going on. the idea of eating something makes sense. we just saw the ad go by, nothing will get me to go buy spam. so what is the point? >> as you talk about every time i am on, you're not necessarily the market. melissa: i don't buy that for a
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minute, i am the fire of our household. i have a six-year-old, a two-year-old and a husband and i buy stuff for my dad, i'm always consuming all the time, i'm everybody's market. i don't buy that argument, i spend a lot of money. >> so what about this home depot did a special sale on linoleum and called it the nal four, with that get your attention? what if they came out with arch madness which mar? there are lots of ways to do it. melissa: it would take me a lot going to hooters. last time i was in central america and just desperate for a cheeseburger so is willing to go anywhere. but i don't think i have been to a hooters in the u.s. when i am watching basketball or
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whatever is on television and they show me a pizza that incentivizes me to go to the computer in order a pizza, i don't know. how much is it really worth to tie into march madness? is this everything right now? >> march madness is the largest sporting event in the u.s. if you follow the dollars, which i know you love to do, nfl final $576 million, nba finals $537 million, baseball $354 million. you know this year march madness is going to top a billion dollars in ad sales. if a company can figure out a way to get in without paying it, it sounds like a good deal to me. melissa: thank you for coming on, we appreciate it.
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>> harvard, university of florida. you have to send me some pastrami and bagels, if the crimson when i will send you stoned crab. melissa: if harvard scores one point, i win. how about that? >> i have to go with my hometown, miami will end up with the to spot. melissa: you are on. coming up on "money," sometimes six minutes can make all the difference. one of the nfl's best defensive end just got sacked for $8 million. you will never believe this insane story. you can never have too much "money." ♪
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♪ melissa: all right, this time for little fun with "spare change" today. thanks to both of you read first up, viewers beware. new study says to eat more if you're in front of the tv. in fact, distracted eating can make you eat 60% more. you can even increase how much
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you eat later on at other meals. what is better than sitting in front of the television with a bag of doritos? >> i eat in front of the television every night, i do. but they will develop a mobile phone app to let you know. at is it going to do? melissa: of course it is on. we encourage people to do anything while watching tv. do not turn off your television, right? >> there are two layers with my kids. food intake seems to increase proportionally with watching the knicks getting clobbered. and the second one for me is never watch bill o'reilly on an empty stomach. very bad for your digestion. melissa: those are good rules. this is one for the books, great example of why fax machines are
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so '90s. elvis dumervil, defensive end fax his contract to the denver broncos, it actually did not come through until six minutes past the deadline so he was caught bcutby the team, he lost. he fired his agent as a result. now he may end up staying with the team. >> first of all if you know you're going to want $8 million, apparently what he wanted, you'd think he would have done it a little earlier. melissa: nothing like really waiting until the very last minute. >> what it is, it is the agent. next to members of congress and lawyers, sports agents are the sleaziest people in the world. melissa: every sports agent just appreciate you saying that. >> they wait and wait and wait, and then they strike. this is what happened in elvis
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dumervil case. it is a feel-good story, he will get re-signed in the agent got fired. melissa: so it was his fault anyway. >> of course it was. four years ago this happened with a guy with the miami heat. he felt so bad, he paid the $4 million that the player lost. melissa: now two more gold. it turns out gold can be produced as a result of rthquakes. water in faults vaporizing during earthquakes leading gold behind, look at how lovely it is. it would take thousands of years to build a mineable deposit, but i don't know, what do you think good news for gold. >> good news for fat